Tag Archives: apprenticeship levy

It’s been another busy year for The Knowledge Exchange Blog. We’ve covered a variety of subjects, from housing and the environment to education and planning. So as the year draws to a close, now’s a good time to reflect on some of the subjects we’ve been blogging about during 2018.

Bibliotheraphy, walkability and family learning

We started the year with health and wellbeing in mind. Our first blog post of 2018 highlighted the increasing application of “bibliotherapy”:

“The Reading Agency’s Books on Prescription scheme has been running nationally in England since 2013 and since it started has been expanded to cover Books on Prescription for common mental health conditions, Books on Prescription for dementia, Reading Well for young people and Reading Well for long term conditions. 635,000 people are estimated to have benefited from the schemes.”

In February, we blogged about family learning, where parents engage in learning activities with their children. This can involve organised programmes such as Booksmart, but activities such as reading to children or singing with them can also be described as family learning:

“Research from the National Literacy Trust, suggests that “parental involvement in their child’s reading has been found to be the most important determinant of language and emergent literacy”.

In recent years, growing numbers of cities and towns have introduced “shared spaces”, where pedestrians, cyclists and drivers share the same, deregulated space. As we reported in March, the practice has proved divisive, with supporters claiming that shared spaces can improve the urban environment, revitalise town centres, and reduce congestion, while opponents believe that shared space schemes – particularly the removal of kerbs and crossings – are dangerous and exclusionary for vulnerable groups of pedestrians, people with disabilities and those with reduced mobility.

In April, we took the opportunity to promote the Idox Information Service, highlighting a selection of the hundreds of items added to our database since the beginning of 2018. All members of the Idox Information Service have access to the Idox database, which contains thousands of reports and journal articles on public and social policy.

Voters, apprentices and city trees

Local elections in May prompted us to blog about the voting rights of those with age related degenerative mental conditions such as dementia and Alzheimer’s.

“Many people with dementia still hold strong political feelings, and know their own opinion when it comes to voting for political parties or in a referendum. However, the process of voting can often present them with specific challenges. It is up to local authority teams and their election partners to make the process as transparent and easy for people with dementia and Alzheimer’s as possible. Specific challenges include not spoiling the ballot, and the ability to write/ see the ballot paper and process the information quickly enough.”

A year after the launch of the government’s Apprenticeship Levy in June, we highlighted a report from the Reform think tank which suggested that significant reforms were needed to improve England’s apprenticeship system. Among the recommended changes were a renewed focus on quality over quantity, removal of the 10% employer co-investment requirement and making Ofqual the sole quality assurance body for maintaining apprenticeship standards.

The shortage of affordable housing continues to exercise the minds of policy makers, and in July we blogged about its impact on the private rented sector:

“In many cases people view the private rented sector as being a stop gap for those not able to get social housing, and not able to afford a deposit for a mortgage. Although in many instances they may be right, the demographic of those renting privately now is changing, and becoming more and more varied year on year, with many young professionals and families with children now renting privately.”

The long, hot summer of 2018 was one to remember, but its effect on air quality in urban areas underlined the need to combat the pollution in our air. In August, we blogged about an innovation that could help to clear the air:

“Designed by a German startup, a City Tree is a “living wall” of irrigated mosses with the pollution-absorbing power of almost 300 trees. A rainwater-collection unit is built into the City Tree, as well as a nutrient tank and irrigation system, allowing the assembly to water itself.”

Planning, polarisation and liveable cities

September saw another highly successful Scottish Planning and Environmental Law conference. It opened with a thought-provoking presentation by Greg Lloyd, professor Emeritus at Ulster University, and visiting professor at Wageningen University in the Netherlands, who challenged delegates to consider what might happen if the current planning system were to be abolished altogether, to clear the way for a new and more fit-for-purpose planning system.

In October, we focused on the ever-increasing job polarisation affecting the labour market:

In the EU, data shows that between 2002-2014 medium skilled routine jobs declined by 8.9%, whilst high skilled roles rose by 5.4%, and low skilled jobs grew marginally (0.1%). As a consequence, wage inequalities have grown.”

More than half the world’s population now lives in urban areas, presenting significant challenges to local authorities who have to try and make their cities work for everyone. In November, we reported from The Liveable City conference in Edinburgh, which showcased ideas from the UK and Denmark on how to make cities more attractive for residents and visitors:

“A great example of the reinvention of a post-industrial area came from Ian Manson, Chief Executive of Clyde Gateway, Scotland’s biggest and most ambitious regeneration programme. When it comes to recovering from the demise of old industries, the East End of Glasgow has seen many false dawns. As Ian explained, when Clyde Gateway was launched ten years ago, the local community were sceptical about the programme’s ambitions. But they were also ready to engage with the project. A decade on, the area has undergone significant physical generation, but more importantly this has taken place in partnership with the local people.”

Although much has been made of the government’s claim that austerity is coming to an end, many local authorities are still struggling to provide services within tight financial constraints. One of our final blogs this year reported on local councils that are selling their assets to generate revenue:

“In a bid to increase affordable housing supply, for example, Leicester City Council has sold council land worth more than £5m for less than £10 as part of deals with housing associations.”

As we enter 2019, those uncertainties remain, and what actually happens is still impossible to predict. As always, we’ll continue to blog about public policy and practice, and try to make sense of the important issues, based on evidence, facts and research.

To all our readers, a very happy Christmas, and our best wishes for a peaceful and prosperous new year.

As well as developing the careers of school-leavers and adults and contributing to the economy, further education (FE) also plays a crucial, but unsung role in our daily lives. As one college chief executive has observed:

“Over the past 25 years, we have quietly gone about our work producing the people that matter most to our communities – those that build our houses, fix our boilers, our computers and our cars, care for our children and our parents, ensure the planes that take us on holiday are safe and look after us when we get to our destination, cook our special meals, entertain us live and on TV, enrich our lives with their art, cut our hair and make us even more beautiful!”

But now the sector is facing key challenges that are likely to change the face of further education in the years ahead.

28 major pieces of legislation related to vocational, FE and skills training

Six different ministerial departments with overall responsibility for education

48 secretaries of state with relevant responsibilities

The FE sector has proved to be resilient and adaptable to these changes, but many believe this instability has left the sector unfit for purpose. In 2016, the Sainsbury review of technical education recommended changes to England’s FE system to make it less complex. These were taken up by the government, which introduced a new Post-16 Skills Plan. The reforms will replace thousands of qualifications with fifteen new technical education pathways. The new ‘T-Levels’, in subjects such as construction, childcare and hairdressing, will be rolled out by 2022.

It’s too early to say what effect the reforms will have, but some already have misgivings. A senior civil servant at the Department for Education has advised deferring the start date for T-Levels, while the shadow education secretary Angela Rayner argued the changes would not make up for “years of cuts” to the FE sector.

Funding pressures

The Social Market Foundation reported in 2017 that, since 2010, the adult skills budget in England has fallen in cash terms. “Alongside this reduction, the Institute for Fiscal studies (IFS) has shown that 16–18 education spending has reduced.”

Funding pressures on FE are likely to continue. In August, the Treasury instructed Whitehall departments with non-protected budgets, including FE, to identify areas of “potential savings”. David Hughes, chief executive of the Association of Colleges, said “The news that the chancellor may be looking for further funding cuts from unprotected departmental budgets is very worrying for colleges. College students and staff have already taken on too much pain from the funding cuts in further education over the last decade.”

The government has announced a review of post-18 education funding, including further education. The review will be supported by an independent panel, led by Philip Augar, and is expected to conclude in early 2019.

New apprenticeships

The apprenticeship levy was introduced on 6 April 2017. It requires all UK employers with a wages bill of over £3 million per year to invest 0.5% of their bill into apprenticeships.

Once they start making payments, employers can access the funds through a Digital Apprenticeship Service (DAS) account that allows them to pay for apprentice training, choose the training provider they want to provide the training, and find apprentices for their vacancies. Initially, this service is only available to those employers paying the levy. However, the government aims to extend access to all employers by 2020.

In May 2018, the Reform think tank published an assessment of the apprenticeship levy’s impact in its first year of operation. The report found that in the six months after the levy was introduced, the number of people starting an apprenticeship was 162,400 – over 40% lower than the same period in the previous year. Concerns about the levy were heightened in May 2018 with official figures revealing a 40% drop in apprentice starts across all industries in February, compared with the previous year. The statistics prompted further calls for reform of the levy. However, the Learning and Work Institute (L&WI) has argued that it is still too soon to judge the new system.

Devolving FE

Central government continues to control FE funding, but local authorities and Combined Authorities are pressing for greater devolution of the adult skills budget. City mayors are also showing interest in bringing more of FE and skills under local control.

At the same time, the FE sectors in, Wales, Northern Ireland and Scotland have been experiencing their own challenges:

College funding in Wales has remained tight over the last few years, but a 2017 report from Colleges Wales highlighted the economic impact of FE in Wales. It reported a return of £7.90 for every £1 spent, an average annual return on investment of 24%.

A report by Viewforth Consulting report estimated that the FE sector generated over £524 million of output in Northern Ireland from college and student off-campus expenditure. A new further education strategy was launched in 2016, but the collapse of the Northern Ireland Assembly has presented the FE sector with additional uncertainties.

Between 2012 and 2014, 25 colleges in Scotland merged to create ten new regional ‘super colleges’ under a Scottish Government programme to make the sector more efficient and ‘responsive to the needs of students and local economies’. According to the Scottish Funding Council, the merger programme cost £72m, but delivered annual savings of more than £52m. However, Audit Scotland’s 2017 review of further education in Scotland found that student numbers at Scotland’s colleges fell to the lowest level for almost a decade. Performance figures on Scotland’s colleges published by the Scottish Funding Council (SFC) in February 2018 show that the success rate in almost two-thirds of Scottish colleges has dropped.

The future

It’s clear that funding issues and policy changes will continue to affect FE in the UK. But other challenges are also looming.

The Social Market Foundation has highlighted market developments likely to present competitive threats to the FE sector. These include more employers moving in to provide training traditionally delivered by the FE sector, and the advance of educational technology, encouraging more learners to self-direct.

As for Brexit, the Association of Colleges believes the impact of the UK leaving the European Union may be less in FE than in other areas of national life, but forecasts that Brexit has the potential to bring big changes to the demand for skills and training.

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It’s now been a full year in operation, but will the apprenticeship levy “incentivise more employers to provide quality apprenticeships” and “transform the lives of young people who secure them”, as the government hopes?

A new report from Reform, which has reviewed the available evidence, suggests that “significant reforms are needed”.

Purpose of the levy

Unveiled in 2015 as part of the government’s commitment to deliver three million apprenticeship starts by 2020, the apprenticeship levy aims to encourage employers to invest in apprenticeship programmes and raise additional funds to improve the quality and quantity of apprenticeships.

The levy mandates that employers in England with annual wage bills of over £3 million pay a tax of 0.5%, which can then be spent on apprenticeship training. Employers pay their levy contributions via the PAYE system into a digital account held by HM Revenue and Customs (HMRC). Smaller employers can also access the funds generated through the levy, but they must pay a ‘co-investment’ of 10% towards the cost of the training.

According to the 2015 Spending review and Autumn statement, the levy was expected to raise £3 billion per annum by 2019/20. However, the evidence reviewed by Reform suggests the levy is instead leading to unintended consequences.

Lower quality apprenticeships and bureaucratic burden?

The number of apprenticeship starts following the introduction of the levy has continued to fall. Reform highlights that the number of people starting an apprenticeship in the six months after it was introduced was over 40% lower than the same period the previous year. The most recent figures are little improved – in December 2017 there were 16,700 apprenticeship starts compared to 21,600 in December 2016.

Reform also found that younger and less experienced people have been particularly badly affected with the focus now being towards Higher and Degree level apprenticeships. And many apprenticeships are now for low-skilled, low-wage jobs or for re-labelled management programmes and do not meet the original definition of an apprenticeship, thus diminishing the quality.

“In the long run, even just a small proportion of low-quality apprenticeships can damage the overall reputation and “brand” of apprenticeships.”

The use of the levy to re-badge existing training courses as a way to shift the costs onto government is a particular concern. A CIPD survey of more than 1000 organisations in January 2018 found that:

46% of levy-paying employers think the it will encourage their organisation to rebadge current training in order to claim back their allowance

40% of levy-paying employers said it will make little or no difference to the amount of training they offer

35% of employers will be more likely to offer apprenticeships to existing employees instead of new recruits

Commenting on the findings, skills adviser at the CIPD, Lizzie Crowley, said “this is not adding any additional value and is creating a lot of additional bureaucracy and cost.”

Reform argues that the impact on the public finances of allowing employers to re-label courses in this way should not be underestimated. It is estimated that inappropriately labelled ‘apprenticeships’ represent 37% of the people training towards any apprenticeship standard – a figure that could become even higher if employers are allowed to continue to rebadge training as they see fit.

If current trends continue, the government could be spending almost £600 million per annum by 2019-20 on training courses that have been incorrectly labelled ‘apprenticeships’.

Concerns have also consistently been raised over the complexity of the levy for employers. It has been claimed that the slump in apprenticeship starts could be blamed on “a combination of confusion surrounding the Apprenticeship Levy and the ‘increased administrative burden’ it placed on employers”. The Reform report highlights that the substantial increase in bureaucracy, among other issues, has led business groups to brand the levy ‘disastrous’, ‘confusing’ and ‘broken’.

Despite this, however, there is still support for the levy. A recent survey by the Chartered Management Institute (CMI) of over 1,500 managers found that two-thirds (63%) agree that it is needed to increase employer investment in skills. It has been suggested that employers have ‘fundamentally failed’ to prepare for the levy as the scale of the challenge was not recognised. And a lack of clarity from the government has also been attributed some blame.

Way forward

The evidence would suggest there is potential for the levy but not in its current form.

The Reform report recommends six significant changes if the objectives for funding apprenticeships are to be realised:

there should be a renewed focus on quality over quantity

a new internationally-benchmarked definition of an ‘apprenticeship’ should be introduced

the 10% employer co-investment requirement should be removed

a simpler ‘apprenticeship voucher’ model should replace the existing HMRC digital payment system

all apprenticeship standards and end-point assessments should be assigned a fixed cost

Ofqual should be made the only option for quality assuring the end-point assessments to maintain standards

If the necessary changes are made, the Reform report concludes that “apprentices, taxpayers and employers across the country stand to benefit for many years to come.”